Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Round OH rate, cost per unit and dollar amounts answers to 2 decimal places.) Process Activity Overhead Cost Driver Quantity Components Changeover $ 452,000 Number of batches 750 Machining 300,600 Machine hours 7,740 Setups 227,500 Number of setups 180 $ 980,100 Finishing Welding $ 181,100 Welding hours 4,000 Inspecting 223,000 Number of inspections 805 Rework 61,550 Rework orders 250 $ 465,650 Support Purchasing $ 134,500 Purchase orders 488 Providing space 31,950 Number of units 5,700 Providing utilities 60,330 Number of units 5,700 $ 226,780 Additional production information concerning its two product lines follows. Model 145 Model 212 Units produced 1,900 3,800 Welding hours 800 3,200 Batches 375 375 Number of inspections 510 295 Machine hours 2,290 5,450 Setups 90 90 Rework orders 140 110 Purchase orders 325 163

1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Model 145
Model 212
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145 and $110 for Model 212.
		Model 145	Model 212
3. Assume if the market price for Model 145 is $747 and the market price for Model 212 is $580, determine the profit or loss per unit for each model.
		Model 145	Model 212
Market price